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The Lexus and the Olive Tree: Understanding Globalization (Updated and Expanded Edition)

The Lexus and the Olive Tree: Understanding Globalization (Updated and Expanded Edition)

3.6 45
by Thomas L. Friedman

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A brilliant investigation of globalization, the most significant socioeconomic trend in the world today, and how it is affecting everything we do-economically, politically, and culturally-abroad and at home.

As foreign affairs columnist for The New York Times, Thomas L. Friedman crisscrosses the globe talking with the world's economic and political


A brilliant investigation of globalization, the most significant socioeconomic trend in the world today, and how it is affecting everything we do-economically, politically, and culturally-abroad and at home.

As foreign affairs columnist for The New York Times, Thomas L. Friedman crisscrosses the globe talking with the world's economic and political leaders, and reporting, as only he can, on what he sees. Now he has used his years of experience as a reporter and columnist to produce a pithy, trenchant, riveting look at the worldwide market forces that are driving today's economies and how they are playing out both internationally and locally.

Globalization is the technologically driven expression of free-market capitalism, and as such is essentially an American creation. It has irrevocably changed the way business is done and has raised living standards throughout the world. But powerful local forces-of religion, race, ethnicity, and cultural identity-are in competition with technology for the hearts and minds of their societies. Finding the proper balance between the Lexus and the olive tree is the great game of globalization-and the ultimate theme of Friedman's challenging, provocative book, essential reading for all who care about how the world really works.

Editorial Reviews

Richard Eder
...[A] breathtaking tour, one that possesses the exhilarating qualities of flight and the stomach-hollowing ones of free fall....He can be eloquently outraged about the growing gap between rich and poor and the threat to the environment....For the most part...Mr. Friedman accepts the current version of the invisible hand: globalize, or the economic forces that be will condemn you to be left behind. —The New York Times
Robert Wright
Friedman...doesn't love globalization; he just thinks it's largely a good thing and, in any event, a fact of life....If this book becomes a basic guide to globalization for American opinion makers, as it well may, that will be a good thing.
WQ: The Wilson Quarterly
David S. Landes
...Friedman believes in, approves of, and enthuses for globalization....A purely material account of economics is hardly the whole story....We can and must find sweeter, more winning ways.
New Republic
Josef Joffe
A brilliant guide for the here and now....Friedman knows how to cut through the arcana of high tech and high finance with vivid images and compelling analogies...A delightfully readable book.
The New York Times Book Review
Paul Krugman
Every few years a book comes along that perfectly expresses the moment's conventional wisdom — that says pretty much what everybody else in the chattering classes is saying, but does it in a way that manages to sound fresh and profound.....[This is] the latest in the series. —The Washington Monthly
Stephen Humphries
...Friedman deftly accomplishes the impressive task of encapsulating the complex economic, cultural, and environmental challenges of globalization with the sort of hindsight that future historians will bring to bear upon the subject. —The Christian Science Monitor
Michael Freedman
An American reading Thomas L. Friedman's The Lexus and the Olive Tree would be hard pressed to feel anything less than exuberant about this nation's prospects.
Brill's Content
Ian S. McDonald
In Lexus and the Olive Tree, Friedman's analysis provides a superb introduction to his topic the equivalent of a Globalization 101 for the general reader. His writing is vivid and topical but it is never dull and Friedman's insights are often penetrating.
Scott Whitney

This is an important book; not since Nicholas Negroponte's Being Digital has a volume come along that so well explains the technical and financial ether we are all swimming through. Like fish oblivious to the surrounding water, we need a Negroponte or a Thomas Friedman to give us some instruction in basic hydrology — or, in the case of The Lexus and the Olive Tree, in globalization. Friedman sees globalization as the one big thing, the defining theory of the post-Cold War era. He cites the Lexus as the pinnacle of the high-quality production that the forces of globalization make possible, the olive tree as the symbol of wealth in pre-modern, "slow" economies.

By "globalization" Friedman means the cluster of trends and technologies — the Internet, fiber optics, digitalization, satellite communications — that have increased productivity and cranked up the speed of international business since the fall of the Berlin Wall in 1989. During this period, the declining cost of communications has led to the "democratization" of finance, information and technology. If your company has replaced the switchboard operator with an automated phone menu, if you have ever received a FedEx package or sent an e-mail, you have felt the effects of globalization.

There is hardly a page in the book without an underlineable passage. (For example: "In the Cold War, the most frequently asked question was: 'How big is your missile?' In globalization, the most frequently asked question is: 'How fast is your modem?'") Globalization has created what Friedman calls the "Electronic Herd" — investors and speculators whose roving hot money "turns the whole world into a parliamentary system, in which every government lives under the fear of a no-confidence vote." Brazil knows the effects of such a vote all too well; so do Thailand and Indonesia.

Sometimes Friedman can be a rather grandiose name-dropper: "As I was traveling with Secretary of State Baker"; "when I interviewed former Indian Prime Minister I.K. Gujral"; "I ran this by James Cantalup, president of McDonald's International." But as foreign-affairs columnist for the New York Times, he really has talked to all these people. And he has used his remarkable vantage point to provide a readable overview that no academic or narrow-beat reporter could have given us. Occasionally, the habits he has developed as a columnist get in the way. His imaginary arguments between such people as Warren Christopher and Syrian President Hafez el-Assad are a little too cutesy-chatty, and his overly clever chapter titles ("DOScapital 6.0," "Microchip Immune Deficiency," "Globalution") can be annoying. Still, these are quibbles about a genuinely important book.

I have one reservation, though, that isn't a quibble: I would be embarrassed to lend this book to friends overseas. Friedman gets very rah-rah as an American apologist, and he poses no serious objections to the worldview that regards globalization as an international extension of Manifest Destiny. In the gushy tribute to American values he offers on his final pages, you can almost hear the Boston Pops swelling under the patriotic fireworks.

His message, though, can't be easily ignored. According to Friedman, there is no longer a first, a second and a third world; there are just the Fast World and the Slow World. And his message to the Slow World is simple and a bit chilling: Speed up or become road kill.

Gail Jaitlin
Thomas L. Friedman is scaring me. I am reading his new book, The Lexus and the Olive Tree , and suddenly I imagine I am in the middle of an IBM commercial, the kind with brightly colored images of Tibetan monks and African villagers tap-tapping away at laptops. I know that, in fact, Tibetan monks usually live meditative, ascetic lives, and that African villagers sometimes go hungry during times of drought. Yet I am swept up in these images, just as I am in Friedman's cheerful, optimistic book about the new global economy and how it will enrich all our lives.

Don't get me wrong — it's a terrific book. As in his columns for The New York Times, Friedman's writing is illustrative and clear. He uses catchphrases and stories to make clear otherwise complex ideas. For instance, the "Golden Straitjacket" is his term for what a country dons when it accepts the rules of a free-market economy — it accepts the promise of a rising standard of living (the gold) by tossing out old-fashioned ideologies like communism and socialism and accepting the rules (the straitjacket) of capitalism. A country can refuse to put on the Golden Straitjacket, and retain its old systems and values, and try to protect itself from the outside world. But the outside world gets in somehow, through the Internet and cable TV, and more and more citizens find themselves clamoring for the straitjacket. Eventually, the country must put it on, or risk having its citizens fall far behind the rest of the world (or worse, revolt, as happened recently in Indonesia).

Friedman's travel stories (he calls himself a "tourist with an attitude") are wonderful — they leave the reader hungering for a whole bookful — and his optimism about the new global economy is infectious. The central metaphor of the book, which gives the book its title, is the "Lexus and the Olive Tree." The Lexus, the luxury car, represents globalization. The olive tree stands for local concerns, cultural pride, and nationalism. With that pairing, Friedman has done a very neat job of explaining world politics as they now exist. The Cold War determined world politics until very recently; globalization determines them now. The relaxation of trade barriers and taxes, the accessibility of international markets through the Internet and Federal Express, the global stock market — all of these have made it possible for people to become more prosperous than ever before, no matter where they live. What this has done, however, is to make some people very nervous about losing their national or cultural identity. There is a tension now between people's desire for world culture and increased profits, and their desire to remain unique beings in localized cultures and traditions. Friedman illustrates his point by mentioning a few recent news events and telling us whether the Lexus or the olive tree was the winner. (The current war in Yugoslavia would certainly be an example of the olive tree winning out — despite all pressures from the U.S. and the world economy, the Serbs insist on fighting for Kosovo, their olive tree.) The pressures of the global economy seem to demand peace (you can't very well do business with India, for example, if your country is at war with it); Friedman is excited about globalization because he believes it will eventually bring world peace, as soon as the Lexus and the olive tree can be brought into co-existence.

It all sounds rosy, but... And now I come to my one big problem with Friedman's enthusiasm for this faster, barrier-free world. While I think his theories are sound, I am worried (as he does not seem to be) for those who get left behind. Not everyone in the Brazilian rain forest can afford a laptop computer; not everyone in East Lansing, Michigan, is young and supple enough to go through hours and hours of retraining to learn how to use the Net to their advantage. Friedman, who calls these people "turtles" because of their inability or unwillingness to move apace of the quickening world, seems to be saying, "So what? Too bad." The safety nets, such as welfare and unemployment insurance, are falling away, and to them Friedman says good riddance. He uses a jungle metaphor to illustrate the new world order: Everyone is either a lion or a gazelle. The lion wakes up every morning hoping he can catch the slowest gazelle; the gazelle wakes up every morning hoping that she can outrun the fastest lion. In other words, kill or be killed is the rule of the new global economy.

But do we really want our civilization to be run according to the law of the jungle? Friedman thinks so. "[T]he centrally planned, nondemocratic alternatives...communism, socialism, and fascism — helped to abort the first era of globalization [the industrial revolution]...[and] they didn't work." But Friedman is forgetting some of the other responses to dehumanizing industrialization — stunt journalism and labor unions, which banded together in the early 1900s to fight for shorter workdays, higher wages, less life-threatening working conditions, and an end to child labor. Friedman has a very short memory if he believes that pure, unfettered capitalism is necessarily a good thing.

Gail Jaitin is a writer living in Jersey City.

Publishers Weekly - Publisher's Weekly
"In the Cold War, the most frequently asked question was 'How big is your missile?' In globalization, the most frequently asked question is 'How fast is your modem?' " So writes New York Times Foreign Affairs columnist Friedman (author of the NBA-winning From Beirut to Jerusalem), who here looks at geopolitics through the lens of the international economy and boils the complexities of globalization down to pithy essentials. Sometimes, his pithiness slips into simplicity. There's a jaunty innocence in the way he observes that "no two countries that both had a McDonald's had fought a war against each other, since each got its McDonald's." For the most part, however, Friedman is a terrific explainer. He presents a clear picture of how the investment decisions of what he calls the "Electronic Herd" — a combination of institutions, such as mutual funds, and individuals, whether George Soros or your uncle Max trading on his PC — affect the fortunes of nations. The book's title, in its reference to both the global economy (the Lexus) and specific national aspirations and cultural identity (the olive tree), echoes Benjamin Barber's Jihad vs. McWorld. Like Barber, Friedman takes note of what may be lost, as well as gained, in the brave new world: "globalization enriches the consumer in us, but it can also shrink the citizen and the space for individual cultural and political expression." The animating spirit of his book, however, is one of excitement rather than fear. Some of the excitement is the joy a good lecturer feels in making the complex digestible. Writing with great clarity and broad understanding, Friedman has set the standard for books purporting to teach Globalization 101.
Library Journal
A two-time Pulitzer Prizewinning reporter and current New York Times columnist, Friedman believes that with the end of the Cold War we are now in the era of the international globalization system. He defines globalization as the integration of finance, stock markets, nations, and technology and explains its dependence on computers, the Internet, transaction speed, and innovation. Friedman catalogs the benefits and pitfalls of globalization in a text so clearly written and with so many examples that one easily forgets that this is a book about economics. He makes a compelling case that international economics is changing and that globalization is inevitable and calls for both the United States and global business to pursue responsible capitalism that would make globalization more effective and fair. He ends with a call for businesses to understand that U.S. military and economic strength provide essential stability. Readers of Friedmans column will recognize many of these concepts. Well written, cogently argued, thought-provoking, and very highly recommended.
— Patrick J. Brunet, Western Wisconsin Technical College Library, La Crosse
Nicholas Lemann
...Friedman has escaped the most serious occupational hazard for a writer on world affairs: the studiously airy, condescending, patrician tone. He may by hanging out with Them these days, but he's still on Our side. He has a born reporter's inextinguishble interest in everyhting, and a great sense of the telling details. His experience of the world's societies may be broad and thin, yet he quite often finds a fresh, memorable nugget inservice of his view that globalization is the "One Big Thing" in the world today.
The New Yorker
Kirkus Reviews
A brilliant guidebook to the new world of "globalization" by Pulitzer-winning New York Times columnist Friedman (From Beirut to Jerusalem, 1988). Like El Niño, globalization is blamed for anything and everything, but few understand just what it really is. In simplest terms, Friedman defines globalization as the world integration of finance markets, nation states, and technologies within a free-market capitalism on a scale never before experienced. Driving it all is what he calls the "Electronic Herd," the faceless buyers and sellers of stocks, bonds, and currencies, and multinational corporations investing wherever and whenever the best opportunity presents itself. It is a pitiless system—richly rewarding winners, harshly punishing losers—but contradictory as well. For nations and individuals willing to take the risk, globalization offers untold opportunity, yet in the process, as the "Electronic Herd" scavenges the world like locusts in the search for profit, globalization threatens to destroy both cultural heterogeneity and environmental diversity. The human drive for enrichment (the Lexus) confronts the human need for identity and community (the olive tree). The success of globalization, Friedman contends, depends on how well these goals can be satisfied at one and the same time. He believes they can be, but dangers abound. If nation states sacrifice too much of their identity to the dictates of the "Electronic Herd," a backlash, a nihilistic rejection of globalization, can occur. If nation states ignore these dictates, they face impoverishment; there simply is no other game in town. Friedman's discussion is wonderfully accessible, clarifying the complex withenlightening stories that simplify but are never simplistic. There are flaws, to be sure. He is perhaps overly optimistic on the ability of the market forces of globalization to correct their own excesses, such as environmental degradation. Overall, though, he avoids the Panglossian overtones that mar so much of the literature on globalization. Artful and opinionated, complex and cantankerous; simply the best book yet written on globalization. (First printing 100,000) (Author tour)

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The Lexus and the Olive Tree

Understanding Globalization

By Thomas L. Friedman

Farrar, Straus and Giroux

Copyright © 2000 Thomas L. Friedman
All rights reserved.
ISBN: 978-1-4299-9428-6


The New System

What was it that Forrest Gump's mama liked to say? Life is like a box of chocolates: you never know what you're going to get inside. For me, an inveterate traveler and foreign correspondent, life is like room service — you never know what you're going to find outside your door.

Take for instance the evening of December 31, 1994, when I began my assignment as the foreign affairs columnist for The New York Times. I started the column by writing from Tokyo, and when I arrived at the Okura Hotel after a long transpacific flight, I called room service with one simple request: "Could you please send me up four oranges." I am addicted to citrus and I needed a fix. It seemed to me a simple enough order when I telephoned it in, and the person on the other end seemed to understand. About twenty minutes later there was a knock at my door. A room service waiter was standing there in his perfectly creased uniform. In front of him was a cart covered by a starched white tablecloth. On the tablecloth were four tall glasses of fresh-squeezed orange juice, each glass set regally in a small silver bowl of ice.

"No, no," I said to the waiter, "I want oranges, oranges — not orange juice." I then pretended to bite into something like an orange.

"Ahhhh," the waiter said, nodding his head. "O-ranges, o-ranges."

I retreated into my room and went back to work. Twenty minutes later there was another knock at my door. Same waiter. Same linen-covered room service trolley. But this time, on it were four plates and on each plate was an orange that had been peeled and diced into perfect little sections that were fanned out on a plate like sushi, as only the Japanese can do.

"No, no," I said, shaking my head again. "I want the whole orange." I made a ball shape with my hands. "I want to keep them in my room and eat them for snacks. I can't eat four oranges all cut up like that. I can't store them in my mini-bar. I want the whole orange."

Again, I did my best exaggerated imitation of someone eating an orange.

"Ahhhh," the waiter said, nodding his head. "O-range, o-range. You want whole orange."

Another twenty minutes went by. Again there was a knock on my door. Same waiter. Same trolley, only this time he had four bright oranges, each one on its own dinner plate, with a fork, knife and linen napkin next to it. That was progress.

"That's right," I said, signing the bill. "That's just what I wanted."

As he left the room, I looked down at the room service bill. The four oranges were $22. How am I going to explain that to my publisher?

But my citrus adventures were not over. Two weeks later I was in Hanoi, having dinner by myself in the dining room of the Metropole Hotel. It was the tangerine season in Vietnam, and vendors were selling pyramids of the most delicious, bright orange tangerines on every street corner. Each morning I had a few tangerines for breakfast. When the waiter came to get my dessert order I told him all I wanted was a tangerine.

He went away and came back a few minutes later.

"Sorry," he said, "no tangerines."

"But how can that be?" I asked in exasperation. "You have a table full of them at breakfast every morning! Surely there must be a tangerine somewhere back in the kitchen?"

"Sorry." He shook his head. "Maybe you like watermelon?"

"O.K.," I said, "bring me some watermelon."

Five minutes later the waiter returned with a plate bearing three peeled tangerines on it.

"I found the tangerines," he said. "No watermelon."

Had I known then what I know now I would have taken it all as a harbinger. For I too would find a lot of things on my plate and outside my door that I wasn't planning to find as I traveled the globe for the Times.

Being the foreign affairs columnist for The New York Times is actually the best job in the world. I mean, someone has to have the best job, right? Well, I've got it. The reason it is such a great job is that I get to be a tourist with an attitude. I get to go anywhere, anytime, and have attitudes about what I see and hear. But the question for me as I embarked on this odyssey was: Which attitudes? What would be the lens, the perspective, the organizing system — the superstory — through which I would look at the world, make sense of events, prioritize them, opine upon them and help readers understand them?

In some ways my predecessors had it a little easier. They each had a very obvious superstory and international system in place when they were writing. I am the fifth foreign affairs columnist in the history of the Times. "Foreign Affairs" is actually the paper's oldest column. It was begun in 1937 by a remarkable woman, Anne O'Hare McCormick, and was originally called "In Europe," because in those days, "in Europe" was foreign affairs for most Americans, and it seemed perfectly natural that the paper's one overseas columnist would be located on the European continent. Mrs. McCormick's 1954 obituary in the Times said she got her start in foreign reporting "as the wife of Mr. McCormick, a Dayton engineer whom she accompanied on frequent buying trips to Europe." (New York Times obits have become considerably more politically correct since then.) The international system which she covered was the disintegration of balance-of-power Versailles Europe and the beginnings of World War II.

As America emerged from World War II, standing astride the world as the preeminent superpower, with global responsibilities and engaged in a global power struggle with the Soviet Union, the title of the column changed in 1954 to "Foreign Affairs." Suddenly the whole world was America's playing field and the whole world mattered, because every corner was being contested with the Soviet Union. The Cold War international system, with its competition for influence and supremacy between the capitalist West and the communist East, between Washington, Moscow and Beijing, became the superstory within which the next three foreign affairs columnists organized their opinions.

By the time I started the column at the beginning of 1995, though, the Cold War was over. The Berlin Wall had crumbled and the Soviet Union was history. I had the good fortune to witness, in the Kremlin, one of the last gasps of the Soviet Union. The day was December 16, 1991. Secretary of State James A. Baker III was visiting Moscow, just as Boris Yeltsin was easing Mikhail Gorbachev out of power. Whenever Baker had met Gorbachev previously, they had held their talks in the Kremlin's gold-gilded St. Catherine Hall. There was always a very orchestrated entry scene for the press. Mr. Baker and his entourage would wait behind two huge wooden double doors on one end of the long Kremlin hall, with Gorbachev and his team behind the doors on the other end. And then, by some signal, the doors would simultaneously open and each man would stride out and they would shake hands in front of the cameras in the middle of the room. Well, on this day Baker arrived for his meeting at the appointed hour, the doors swung open and Boris Yeltsin walked out, instead of Gorbachev. Guess who's coming to dinner! "Welcome to Russian soil and this Russian building," Yeltsin said to Baker. Baker did meet Gorbachev later in the day, but it was clear that power had shifted. We State Department reporters who were there to chronicle the event ended up spending that whole day in the Kremlin. It snowed heavily while we were inside, and when we finally walked out after sunset we found the Kremlin grounds covered in a white snow blanket. As we trudged to the Kremlin's Spassky Gate, our shoes crunching fresh tracks in the snow, I noticed that the red Soviet hammer and sickle was still flying atop the Kremlin flagpole, illuminated by a spotlight as it had been for some seventy years. I said to myself, "That is probably the last time I'll ever see that flag flying there." In a few weeks it was indeed gone, and with it went the Cold War system and superstory.

But what wasn't clear to me as I embarked upon my column assignment a few years later was what had replaced the Cold War system as the dominant organizing framework for international affairs. So I actually began my column as a tourist without an attitude — just an open mind. For several years, I, like everyone else, just referred to "the post–Cold War world." We knew some new system was aborning that constituted a different framework for international relations, but we couldn't define what it was, so we defined it by what it wasn't. It wasn't the Cold War. So we called it the post–Cold War world.

The more I traveled, though, the more it became apparent to me that we were not just in some messy, incoherent, indefinable post–Cold War world. Rather, we were in a new international system. This new system had its own unique logic, rules, pressures and incentives and it deserved its own name: "globalization." Globalization is not just some economic fad, and it is not just a passing trend. It is an international system — the dominant international system that replaced the Cold War system after the fall of the Berlin Wall. We need to understand it as such. If there can be a statute of limitations on crimes, then surely there must be a statute of limitations on foreign policy clichés. With that in mind, the "post–Cold War world" should be declared over. We are now in the new international system of globalization.

* * *

When I say that globalization has replaced the Cold War as the defining international system, what exactly do I mean?

I mean that, as an international system, the Cold War had its own structure of power: the balance between the United States and the U.S.S.R. The Cold War had its own rules: in foreign affairs, neither superpower would encroach on the other's sphere of influence; in economics, less developed countries would focus on nurturing their own national industries, developing countries on export-led growth, communist countries on autarky and Western economies on regulated trade. The Cold War had its own dominant ideas: the clash between communism and capitalism, as well as detente, nonalignment and perestroika. The Cold War had its own demographic trends: the movement of people from east to west was largely frozen by the Iron Curtain, but the movement from south to north was a more steady flow. The Cold War had its own perspective on the globe: the world was a space divided into the communist camp, the Western camp, and the neutral camp, and everyone's country was in one of them. The Cold War had its own defining technologies: nuclear weapons and the second Industrial Revolution were dominant, but for many people in developing countries the hammer and sickle were still relevant tools. The Cold War had its own defining measurement: the throw weight of nuclear missiles. And lastly, the Cold War had its own defining anxiety: nuclear annihilation. When taken all together the elements of this Cold War system influenced the domestic politics, commerce and foreign relations of virtually every country in the world. The Cold War system didn't shape everything, but it shaped many things.

Today's era of globalization is a similar international system, with its own unique attributes, which contrast sharply with those of the Cold War. To begin with the Cold War system was characterized by one overarching feature — division. The world was a divided-up, chopped-up place and both your threats and opportunities in the Cold War system tended to grow out of who you were divided from. Appropriately, this Cold War system was symbolized by a single word: the wall — the Berlin Wall. One of my favorite descriptions of that world was provided by Jack Nicholson in the movie A Few Good Men. Nicholson plays a Marine colonel who is the commander of the U.S. base in Cuba, at Guantánamo Bay. In the climactic scene of the movie, Nicholson is pressed by Tom Cruise to explain how a certain weak soldier under Nicholson's command, Santiago, was beaten to death by his own fellow Marines: "You want answers?" shouts Nicholson. "You want answers?" I want the truth, retorts Cruise. "You can't handle the truth," says Nicholson. "Son, we live in a world that has walls and those walls have to be guarded by men with guns. Who's gonna do it? You? You, Lieutenant Weinberg? I have a greater responsibility than you can possibly fathom. You weep for Santiago and you curse the Marines. You have that luxury. You have the luxury of not knowing what I know — that Santiago's death, while tragic, probably saved lives. And my existence, while grotesque and incomprehensible to you, saves lives. You don't want the truth because deep down in places you don't talk about at parties, you want me on that wall. You need me on that wall."

The globalization system is a bit different. It also has one overarching feature — integration. The world has become an increasingly interwoven place, and today, whether you are a company or a country, your threats and opportunities increasingly derive from who you are connected to. This globalization system is also characterized by a single word: the Web. So in the broadest sense we have gone from a system built around division and walls to a system increasingly built around integration and webs. In the Cold War we reached for the "hotline," which was a symbol that we were all divided but at least two people were in charge — the United States and the Soviet Union — and in the globalization system we reach for the Internet, which is a symbol that we are all increasingly connected and nobody is quite in charge.

This leads to many other differences between the globalization system and the Cold War system. The globalization system, unlike the Cold War system, is not frozen, but a dynamic ongoing process. That's why I define globalization this way: it is the inexorable integration of markets, nation-states and technologies to a degree never witnessed before — in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper than ever before, and in a way that is enabling the world to reach into individuals, corporations and nation-states farther, faster, deeper, cheaper than ever before. This process of globalization is also producing a powerful backlash from those brutalized or left behind by this new system.

The driving idea behind globalization is free-market capitalism — the more you let market forces rule and the more you open your economy to free trade and competition, the more efficient and flourishing your economy will be. Globalization means the spread of free-market capitalism to virtually every country in the world. Therefore, globalization also has its own set of economic rules — rules that revolve around opening, deregulating and privatizing your economy, in order to make it more competitive and attractive to foreign investment. In 1975, at the height of the Cold War, only 8 percent of countries worldwide had liberal, free-market capital regimes, and foreign direct investment at the time totaled only $23 billion, according to the World Bank. By 1997, the number of countries with liberal economic regimes constituted 28 percent, and foreign investment totaled $644 billion.

Unlike the Cold War system, globalization has its own dominant culture, which is why it tends to be homogenizing to a certain degree. In previous eras this sort of cultural homogenization happened on a regional scale — the Romanization of Western Europe and the Mediterranean world, the Islamification of Central Asia, North Africa, Europe and the Middle East by the Arabs and later the Ottomans, or the Russification of Eastern and Central Europe and parts of Eurasia under the Soviets. Culturally speaking, globalization has tended to involve the spread (for better and for worse) of Americanization — from Big Macs to iMacs to Mickey Mouse.

Globalization has its own defining technologies: computerization, miniaturization, digitization, satellite communications, fiber optics and the Internet, which reinforce its defining perspective of integration. Once a country makes the leap into the system of globalization, its elites begin to internalize this perspective of integration, and always try to locate themselves in a global context. I was visiting Amman, Jordan, in the summer of 1998 and having coffee at the Inter-Continental Hotel with my friend Rami Khouri, the leading political columnist in Jordan. We sat down and I asked him what was new. The first thing he said to me was: "Jordan was just added to CNN's worldwide weather highlights." What Rami was saying was that it is important for Jordan to know that those institutions which think globally believe it is now worth knowing what the weather is like in Amman. It makes Jordanians feel more important and holds out the hope that they will be enriched by having more tourists or global investors visiting. The day after seeing Rami I happened to go to Israel and meet with Jacob Frenkel, governor of Israel's Central Bank and a University of Chicago–trained economist. Frenkel remarked that he too was going through a perspective change: "Before, when we talked about macroeconomics, we started by looking at the local markets, local financial systems and the interrelationship between them, and then, as an afterthought, we looked at the international economy. There was a feeling that what we do is primarily our own business and then there are some outlets where we will sell abroad. Now we reverse the perspective. Let's not ask what markets we should export to, after having decided what to produce; rather let's first study the global framework within which we operate and then decide what to produce. It changes your whole perspective."


Excerpted from The Lexus and the Olive Tree by Thomas L. Friedman. Copyright © 2000 Thomas L. Friedman. Excerpted by permission of Farrar, Straus and Giroux.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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How do you move forward and build a worldwide operating system that respects people's homes and still empowers individuals, countries, and organizations? The book doesn't give all the answers, but it brings up the issues (Patricia Pomerleau is President and CEO, CEOExpress.com).

Meet the Author

Thomas l. Friedman's now-classic From Beirut to Jerusalem won the 1988 National Book Award and established him as America's leading interpreter of international affairs. Twice a Pulitzer Prize winner for his reportage, he lives in Washington, D.C.

Thomas L. Friedman is an internationally renowned author, reporter, and columnist-the recipient of three Pulitzer Prizes and the author of six bestselling books, among them From Beirut to Jerusalem and The World Is Flat.

He was born in Minneapolis in 1953, and grew up in the middle-class Minneapolis suburb of St. Louis Park. He graduated from Brandeis University in 1975 with a degree in Mediterranean studies, attended St. Antony's College, Oxford, on a Marshall Scholarship, and received an M.Phil. degree in modern Middle East studies from Oxford. After three years with United Press International, he joined The New York Times, where he has worked ever since as a reporter, correspondent, bureau chief, and columnist. At the Times, he has won three Pulitzer Prizes: in 1983 for international reporting (from Lebanon), in 1988 for international reporting (from Israel), and in 2002 for his columns after the September 11th attacks.

Friedman's first book, From Beirut to Jerusalem, won the National Book Award in 1989. His second book, The Lexus and the Olive Tree: Understanding Globalization (1999), won the Overseas Press Club Award for best book on foreign policy in 2000. In 2002 FSG published a collection of his Pulitzer Prize-winning columns, along with a diary he kept after 9/11, as Longitudes and Attitudes: Exploring the World After September 11. His fourth book, The World Is Flat: A Brief History of the Twenty-first Century (2005) became a #1 New York Times bestseller and received the inaugural Financial Times/Goldman Sachs Business Book of the Year Award in November 2005. A revised and expanded edition was published in hardcover in 2006 and in 2007. The World Is Flat has sold more than 4 million copies in thirty-seven languages.

In 2008 he brought out Hot, Flat, and Crowded, which was published in a revised edition a year later. His sixth book, That Used to Be Us: How American Fell Behind in the World We Invented and How We Can Come Back, co-written with Michael Mandelbaum, was published in 2011.

Thomas L. Friedman lives in Bethesda, Maryland, with his family.

Brief Biography

Washington, D.C. area
Date of Birth:
July 20, 1953
Place of Birth:
Minneapolis, Minnesota
B.A. in Mediterranean Studies, Brandeis University, 1975; M.A. in Modern Middle East Studies, Oxford University, 1978

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The Lexus and the Olive Tree (Original Edition) 3.7 out of 5 based on 0 ratings. 46 reviews.
Anonymous More than 1 year ago
The most thought-provoking reading that I have encountered in my life. The historical background he provides lays the foundation of our global system today. Every economy, every political system, every individual is involved in this interconnectedness of money, information, technology, and corruption. Everybody and nobody is safe. Nobody can escape the system. Friedman's perfect use of metaphors and his many global experiences gives much clarity and understanding in a world riddled with complexities and the unknown. Everyone must read, whether you are interested in economics or not, because the decisions of one country will somehow affect everyone else and we must know how to avoid the harm that some will cause as best as possible. You will not regret reading such a masterpiece.
Brenda22BH More than 1 year ago
This book to awhile to read due to the fact that I had the large print edition so looking at it was daunting but it was worth it in the end. I enjoyed the various examples that were provided to explain The Golden Straitjacket, the Electronic Hers, Microchip Immune Deficiency and all the other terminology that he created. While the examples were interesting, they had less of an impact than they would've had a decade ago when the book was published. Even with a decade since its publication, the theories behind the book are sound and can still be seen today.
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dildo More than 1 year ago
Friedman's analysis of cultural trends and events enlightens readers and explores how we can hone globalization to better mankind. He's unique terminology and concepts set him apart from the rest. A piece of intellectual bliss that captivates readers.
EcofriendlyJD More than 1 year ago
With simple terms and a lot of economic terminology, Mr. Friedman made a connection between the day to day decisions and the global growth and decline of nations. When I took a serious look over my budget, at the circumstances that provoked and hindered my purchases, and at the development of my understanding in connection to these purchases, I saw how this book not only makes sense, but is a source for investment success. I highly recommend this book to anyone looking for a good read along with a major self reflection. Five stars.
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mike-v More than 1 year ago
I felt it was my duty as an econ nerd and (newly!) certified economics teacher to see what Thomas Friedman is all about. From his New York Times column to the Sunday morning political talk shows, to documentaries, Friedman was everywhere I turned, and I knew nothing about him.

Friedman, it turns out, is both a brilliant scholar of the globalization wave that is quickly sweeping across the globe; he is also the system's main cheerleader. He describes the new world order all the way from a birds-eye view of the planet down to two customers interacting on the street. Impressive writing, and highly recommended as a primer on the topic. He's got the chops to back up all the buzz.

That being said, I gave The Lexus and the Olive Tree four stars for a reason. This book was originally written in the late nineties, with the "newly updated and expanded edition" I own coming out around the end of 2000. The "fast world" Friedman talks about so often in his book has ironically turned against him by prematurely aging his book. While the underlying theories are still sound, it's lost it's edge a little bit. Friedman believed that by now we'd all be surfing the internet...on our pagers. He also brags about his PC equipped with the latest technology: A Pentium II processor (max speed: 0.45 GHz) and the latest operating system: Windows 98. Whoa. Some of Friedman's guesses sound remarkably familiar. Phones we can send messages on make me think of text messages and reading e-mail on BlackBerries.

This book may be getting a little rusty, but it's still a fascinating, education, mind-blowing ride through the world as it was, the world as it is today, and the world as it might be tomorrow. Final verdict: worth the $15
Guest More than 1 year ago
The Lexus and the Olive Tree by Thomas Friedman presents the case that globalization is inevitable, and we should accept it. His style is to utilize examples from his many trips abroad for The New York Times and how each one proves a point. For example, he discusses how in the smallest, most distant Chinese village during an election for local leadership, the candidates promised to bring fiber-optic cable to the community so that everyone can have telephone. In the next village, the candidate wanted telephones so that their window factory could sell abroad and earn more money. He sees, in this story that the desire of individuals to raise their standard of living, to get their ¿Lexus,¿ they will reach beyond their local community, their history, their ¿olive tree¿ and that globalization is one of the most effective and efficient ways to improve their lives. The issue for each country or society is how to control globalization so that it is a force for good and increases the standard of living for all. Friedman believes that globalization without governmental restraints to protect people and local culture will not be sustainable. One alternative way to fight globalization is ¿step off,¿ to somehow create walls so that the society is not linked to the rest of world. This he believes leads to a lower standard of living and the citizens will revolt or leave. In general, he believes government can be a force for good. In many ways, more than government, he argues that globalization and a market based economy together are a force for good. His most famous example is his Golden Arches Theory of Conflict Prevention, which is that any country that has a McDonalds franchise never started a war against another country with a McDonalds. The reason he claims is that once a country reaches a socio-economic level to support a McDonalds it will not risk that new standard of living in a costly war. Instead the citizens will force the government to consider other means of conflict resolution. The McDonalds corporate staff researched recent wars and proved his point. The recent war in the Balkans does not meet his strict standard as the war in the end was between the Serbs and NATO, which is not a country. While one may quibble with that, the larger point that higher standards of living encourage citizens to develop economic solutions to problems rather than violent ones, such as war, seems to be true. Friedman argues at the end of the book that for globalization to be sustainable it must be able to put a human face on the powerful, brutal forces of the marketplace. He believes there are three areas to focus on ¿ encouraging entrepreneurship because it is the driver of a growing economy, retraining and educating workers for ever more sophisticated jobs as that will help workers deal with reality, and maintaining some parts of the safety net, although which parts he does not say.
Guest More than 1 year ago
I just started this book and am already experiencing buyer's remorse - which is partly my fault and, I like to think, partly the faulty result Thomas Friedman's 'I' problem. I have no doubt Mr. Friedman is an intelligent, experianced person who may have respectible credentials to write on such a topic. The thing that bothers me the most are his stories and his references to God and Bible verses. It totally made me question all of his insights and opinions because to me, people of faith are that and only that, they are not subjective because they believe, often word-for-word in what may possibly be the most elaborate parable ever written which often contradicts reality. Some may think this is a reviewer making a mountain out of a molehill but think about Christian influence in America and how it effects the rest of the world. It wouldn't be the first time someone's painted rosey pictures over reality. (e.g. whenever President Bush opens his mouth)
Guest More than 1 year ago
If you read any part of this book, read the last chapter. You can get the jist, and its the only part of the book that is really interesting. Otherwise I would just skip this one.
Guest More than 1 year ago
Most of the observations would seem to be valid, at least from a privileged vantage point. A better source of this type information is 'Success in a Global Economy'. Written by a talented author that shares his experiences of living and working all over the world.
Guest More than 1 year ago
As stated in some of the other reviews, the basis for much of this book is the author's travels with respect to his economic reporting. I prefer this to a university professor who probably has never left campus. The downside of this is you can't hit every subject and its seemingly limitless cause and effects like Nafta. Parts of this book are a bit dated (he holds up Enron and Compaq as model companies)but the basis for the book is still very sound and easy to read. Some may wish for a more technical economics books, one that no one would read or understand. I wish the book came off more critical of the subject matter, but the author's enthusiasm helps keep you reading.
Guest More than 1 year ago
While Mr Friedman has an extensive resume of journalist experience in various cultures around the globe,I believe that he leaves out important details in many of the economic situations he discusses. When he mentions the NAFTA agreement, he states that there is a consensus of apporval of the agreement, yet he fails to mention the agrement and its connection to the Mexican financial crisis of 1995, which he blames solely on bad investing by Mexican Government officials. He rarely, if ever mentions United States' actions in anything but a rosy light, and he gives the same halo effect to the World Bank and the IMF. I like his idea of the 'Electronic Herd', which I think is the most on point observation in his writing.